FAQ

All types of insurance policies can be sold including term and convertible term, universal, whole life, variable, and second to die. The most attractive types for buyers in the current market are universal life and convertible term.

Yes, the Supreme Court ruled in 1911 that your insurance policy is an asset and may be bought or sold just like your home.

All the rights and ownership of your policy are transferred to the new owner. You do not make any more premium payments.

There is NO out-of-pocket expense at all and you do not need a medical exam.

No. It is possible to sell a portion of your life insurance policy. In this scenario, only the rights of the portion that is sold are transferred to LifeTrust.

It generally takes about 7 to 10 weeks to complete the entire life settlement process. Much of the process time depends on how quickly your insurance company takes to change ownership and beneficiary of the policy to the new owner.

Your life insurance proceeds may be taxable based on how you decide to structure the transaction. We highly recommend that you seek the assistance of a professional tax advisor to determine your individual or corporate tax situation.

As with all important business transactions, policy owners and insureds must be careful not to be the victim of fraud or to commit fraud in connection with a life settlement. Individual policy owners and insureds are often older individuals who may be particularly vulnerable to fraud schemes. The life settlement industry wants to help older adults avoid such circumstances. 

The life settlement industry has observed a particular kind of transaction associated with life insurance policies and wants you to be aware of this. The transaction is known as “Stranger-Originated Life Insurance”, or “STOLI”. STOLI usually involves an older person being approached by a licensed life insurance agent or another party to obtain new life insurance, with the policy being controlled, from the start and paid for by a third party. Some older individuals may even be offered compensation for his or her participation as the insured. 

What makes this problematic is that the New York Insurance Law prohibits a person from initiating or facilitating the issuance of an insurance policy for the intended benefit of a person who, at the time when the policy is issued, has no insurable interest in the life of the person being insured.

For More Information Please go to:

LISA New York Public Awareness Campaign

Once eligibility has been determined and the underwriting process complete, LifeTrust will advance a line of credit against the face value of your existing individual or group life insurance policy. The line of credit is secured by your life insurance policy so there are no monthly payments required and you may use the funds anyway you choose.

Not everyone diagnosed with cancer will qualify. Generally, when certain cancers recur, develop distant metastases, or become refractory to treatment this would suggest eligibility. For those with a projected remaining life expectancy exceeding five years they may not currently be eligible.

When you submit your initial paperwork, you will sign a medical release of information form allowing LifeTrust to obtain your medical records from your attending physicians. Independent oncologists are responsible for establishing a client’s eligibility. They will conduct a thorough review of your medical records and perform a comparative analysis from data containing others with a similar medical profile. There is no need to undergo any additional physical examination.

Not all lines of credit will qualify, but if you encounter a dramatic, more rapid disease progression than what was initially projected, you may be eligible to request a medical re-evaluation. If so, we would obtain updated medical records, resubmit them to the independent oncologists for evaluation, and according to their findings, your line of credit amount may be increased.

There are several factors involved in determining the amount of a client’s line of credit.

• The face amount of your life insurance policy
• The future premium amounts of your policy
• The projected remaining life expectancy of the insured

When all of these factors are considered, the funds you may receive are generally between 35% and 75% of the policy face amount.

Not every life insurance policy will meet the criteria for a LifeTrust line of credit. Some life insurance policies may not qualify due to the face amount of the policy. There are several factors regarding life insurance policies that are required for eligibility.

• You must have one or more life insurance policy that is beyond contestability, (generally two years from the issue date).
• Your life insurance policy must be assignable.
• Most life insurance policies meet the LifeTrust requirements regarding a high claims paying solvency rating.
• Individually owned policies and group coverage are typically acceptable.
• Your life insurance policy does not need to have cash or surrender value to qualify.

Upon funding of your line of credit, LifeTrust will pay on your behalf all future premiums to your life insurance company from your line of credit account.

As a consumer lender, we must comply with state lending regulations. Based on your state of residence, certain restrictions may prohibit your meeting all of the criteria.

• If your state requires a minimum line of credit amount, your life insurance policy face amount may not be enough to support the requirements.
• Your state may have interest rate restrictions that would prevent approval of a line of credit.
• Your state may require additional licensing that LifeTrust may not currently hold.

When you make your initial contact with LifeTrust, a pre-qualification interview will take place by telephone. This begins upon you calling us or we receive your authorization forms by fax, email or mail. You may download the authorization forms from this website or you may place a phone call and speak to one of our experienced staff to get you started.

With receipt of your release forms, we are then able to obtain your medical records and insurance information needed to establish your eligibility and complete the underwriting process. At the completion of this segment, we will contact you and present a LifeTrust line of credit proposal for your consideration. Once the proposal is accepted, we will send closing documents for you to review, sign and return to LifeTrust.

The normal timeframe for LifeTrust to complete the three-step process is four to six weeks. Some of this is dependent upon the response time of your insurance company and physician’s office or treatment facility. While this may seem rather long, we at LifeTrust are dedicated to getting your line of credit ready as quickly as possible.

There are no application fees. However, if LifeTrust presents a line of credit proposal and you accept, an origination fee is applied to your line of credit, based on the face amount of your existing life insurance policy. Additional fees for services requested by the client such as wire transfers or a medical re-evaluation are added to your line of credit.

The origination fee covers the administrative costs of underwriting the line of credit.

There is no personal liability for you, any member of your family or estate. There is no obligation to repay funds or make monthly payments. The line of credit, including principal, interest, origination fee, premiums, and fees are repaid in full when the policy matures.

LifeTrust only considers your medical history and life insurance policy to determine eligibility. Your employment status, repayment ability and credit worthiness are not at issue.

You decide the best way to use your funds. There are no limitations placed on how you choose to use the proceeds from your line of credit.

The line of credit is set up to allow you to choose whether you receive all of your funds in one lump sum or in increments. You also decide if you want to receive your funds by a check or direct wire transfer to your bank account.

LifeTrust understands your concern about your private health information and urges you to read our Privacy and Confidentiality Agreement found under the FORMS Tab located in our website.